HELOC Usage Strategies

[Taylor Farrington]

Considering purchasing my first property potentially using a HELOC as a down payment for a traditional loan. More than likely something that does not need work, so not a BRRRR. I understand that I could use the HELOC to purchase the whole property like cash and avoid the financing all together as well as making my offer more competitive to the seller. Of course that HELOC would be my 2nd mortgage with a non fixed rate. Some people are not interested in that. Also the bank could ask for the funds back at anytime although I am unaware if that is a term with my HELOC.

Question is if I were to make this move could I at a future date go to a traditional 30 year traditional loan in order to pay off the HELOC and free up the equity in my primary residence? If so do I need to have 20% equity in the rental property? How easy is this process and are the banks normally willing to do this. Any ideas or suggestions are welcomed. Thanks.